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First Business

News/Business. Insight on the economy and stock market. (CC)




Annapolis, MD, USA

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Channel 79 (555 MHz)






Michigan 13, Gm 5, Us 5, S&p 5, U.s. 3, Jamie Tyrrell 2, Kollar Kollar 2, Usa 2, China 2, America 2, Jennifer Granholm 2, Lind 1, John Baner 1, Robert Dudley 1, Dudley 1, Richard Ilczyszyn 1, United States 1, Peter Eelman 1, Waldock 1, Us Richard Ilczyszyn 1,
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  FOX    First Business    News/Business. Insight on the  
   economy and stock market. (CC)  

    September 14, 2010
    4:30 - 5:00am EDT  

you're watching first business: financial news, analysis and today's investment ideas. good morning everybody and thank you for joining us it is tuesday september 14th. investors are once again piling back into financial stocks. some analysts say that new capital requirements from the basil committee on banking supervision can actually boost the chance for banks to bring back those dividends once again and that has been bullish for the overall market's, yet some traders are still pretty cautious. caution is always in the air. i am happy that you mentioned the rally that has been happening in the market. keep in mind that president obama came out on friday talking about the details of his economic plan plus you had john baner who is a republican in congress talking about actually agreeing with some tax hikes even though some senators say they will. anything that brings certainty to the market causes a rally. that has definitely been a factor. in other news pacific gas and electric sets up a $100
billion fund for residents of san bruno california in the neighborhood where a gas pipeline exploded last week and households could receive up to $50,000 depending on the extent of the damage to the homes. manufacturing in america continues to indicate strong signs the economy "is" in recovery mode.we stopped by the international manufacturing technology show happening now in chicago to find out if the sector is likely to keep churning along. similar to american workers being asked to do more on the job so are machines.the big trend in the industry is multi tasking machines which can do more than one operation to turn out a product. and in the end manufacturers get more bang for the buck. mutli tasking machines are said to improve accuracy, productivity and competition which saves american jobs.peter eelman vice president of exhibition and
communications for the association for manufacturing technology which runs the trade show tells me the industry appears to be more focused on maintaining production within american shorelines. milltronics of minnesota has been manufacturing mills and
laves (lathes)? in the u.s. since the 70's. and after laying off american workers during the downturn.. the company is bringing some back. the june/july sales numbers indicate a much more sane climb out which is good news, because if you get kind of the hockey stick if you will, while some people will feel good about that's what set you at risk of kind of the double dip. manufacturing tends to slow down june to august... not so this year the latest reading of the ism factory index increased to 56.3% in august topping economist predictions of 53.2% for the month and 55.5% in july. a plus for this year's manufactering trade show. there's much more to tell ((news)) from the manufacturing sector coming up this week we will have reports including more on how techonology and innovation are changing the industry.there's more news from the manufacturing sector coming up later this week we will have reports on how techonology and innovation are changing the industry. we are now joined by richard ilczyszyn, lind-waldock. we have a third test to the s&p 500 of 1120 so could we see a short squeeze where all the bears buy back all their shorts and drive the market higher? yes absolutely we are at that price point right into the close on monday afternoon. basically the market set up this way, we had better chinese numbers on sunday nights trade and then backed up by the banking bill that everybody seems to like
with the banking sector leading the way. i think there will be resistance up here in the 1120 to 1125 area the first time up. but a strong close above these three months highs making by years back in the market. i think though as far as the technicals are showing we are a little bit overbought here. we have had several days up here on light volume. i think there is a selling opportunity up here the first couple of times until the market closes out above that level. it sounds like you are still cautious on stocks for now. you are also watching the metals market. with the better manufacturing and sales numbers out of china that gives copper a reason to rally. and it's bringing up some of the other metals. in fact if you take a look at palladium that is another market that i like. it is in the platinum group of metals. 80 percent of all manufacturing goods has one or all of those platinum metals in it. this gives you the
fundamental reason to buy it. backed up by the chart i think palladium is a great market to watch as well as copper. bottom line if the metals stay strong does this mean a good thing for the economy? absolutely. sometimes you see copper move before the s&p, the other way around on monday. those two definitely move in tandem. thank you very much for joining us richard ilczyszyn, lind- waldock. b-p says it may not use all of the 20-billion dollars it set aside for victims of the oil spill in the gulf of mexico.incoming b-p c-e-o robert dudley reportedly said the 20-billion dollar claim fund exceeds the estimated dollar amount of legal claims the company has received so far.dudley also says he does not expect state claims, to be too high either.b-p may even start paying out dividends to shareholders in the fourth quarter of this year after deciding to stop handing them out in june that cash was used to pay for costs associated with the spill.
still to come from real estate to gold new ideas from a stock picker that's coming up later on.but first the governor of michigan joins us to talk about her state's new initiatives to boost the auto industry.
it was more surreal than anything.
you're under fire. you're getting blown up. there's definitely adrenaline. there was the explosion, and i remember just opening my eyes, and it got both of my legs. i had surgery after surgery, you know, i was on a lot of pain medicine. "what's going to happen next? and how long am i going to be here?" the wounded warrior project dropped off a backpack for me. and it had everything in there that i could possibly have needed at that time. peer visitors, people who have been where i had been before, said, "look, brother, "everything's going to be okay. "three months from now, or four months "from now, a year from now, you'll be fine." that type of thing was an invaluable service. to be honest, i don't know if i would be as well adjusted as i am now if it wasn't for them. to learn more, call... or visit
reinventing the auto industry is the main focus in michigan which has an unemployment rate of 13% the highest in the nation. we are now joined by jennifer granholm / michigan governor. there is a new automotive battery manufacturing plant opening up in your state, what are your hopes for it? our hope has been to diversify michigan's economy we have obviously been concentrating on automotive manufacturing. our goal has been to diversify our economy both inside and outside the automotive industry. when we saw that the federal government was putting together incentives for the battery industry in america we coupled state incentives with that. as a result we have the first lithium battery company from a one to three. this is one of 16 companies that we have been able to get started in michigan in
the past 12 months. we are very excited because this means jobs. there are 300 people who are working here now, there should be 500 by january and up to 3000 over the next couple years. it is very exciting for us. will this project help to revive other types of suppliers in michigan as well? yes i do. the automotive and industry alone needs people who know how to do clean tech manufacturing and are suppliers to the auto industry. they have the machines, and the expertise manufacturing and advanced manufacturing is in our dna. this is a natural for us and that's why we have so much interest in the battery industry in michigan. in addition to the incentives we have a lot of companies that know how to do the testing of drive trains, the integration of the battery and the engine into the drive train. but the bottom- line for us is that it is a natural growth for our economy.
we couple that with incentives and all of a sudden over the next 10 years we are going to have 63,000 jobs in michigan based upon those incentives. let's take a look at the auto industry as a whole. is there anything that can be done to boost auto sales? obviously we are just coming out of a recession so our confidence is still soft. the good news is this is the first time since the year 2000 that the auto industry is actually hiring. they have hired 55,000 people from last year to this year. basically there has been a reset button that has been pressed on the auto industry and that means excess capacity has been shed and they are fighting. now for the first time since 2004 all three domestic manufacturers are reporting profits. we know we started at a lower base but
the bottom line for michigan and the whole automotive industry is that we have hit bottom and we are coming out. let's talk about gm it's about to become a public company again. are you having any discussions with gm's management about its role in your state over the next five years? gm is a home company so we want to make sure that they grow here. they have shed a awful lot of factories right here in michigan. we have put a lot of incentives on the table to ensure that their growth occurs in michigan. between our incentives and the incentives of the federal government they want to make sure that automotive manufacturing occurs
in the u.s.. when you put our incentives on the table with it we are going to make sure it happens in michigan. there are other states with gm manufacturing as well but we are really bullish with what's happening in the automotive industry now. clearly we cannot declare victory there has to be more cars sold but i think we are today with this battery factory and the the fact that the electrification of the vehicle is happening. gm will come out with the vault before the end of this year. it will be an exciting product. it will be quiet and luxurious and i think people will want to buy it. that's only good news. we will see what happens. thank you for joining us jennifer granholm / michigan governor. even though the trend toward electric cars is slow to take off that same battery manufacturing plant we just highlighted is growing quickly.the factory in michigan will build advanced lithium ion battery systems for electric and plug in hybrid cars, trucks and buses experts say it's a
segment that is likely to see higher demand even as the overall auto industry struggles. "there's a clear mandate that if a car company meets requirements for reduced emissions to improve fuel mileage.. they'll have to electrify... that takes years.. the work going on right now with development, is supportive of the long term play for increased electricification of all transportation fleet " and more good news is that the factory has been able to re- train dozens of workers who lost their jobs at the auto companies. "we're taking workers who came out of shuttered auto plants putting them to work here half of the 300 employees we have were unemployed before they came to work here "that plant will be exporting batteries product to europe and china it also received a 250 million dollar grant from the energy department as part ofthe economic stimulus package. still ahead
a stock picker who remains bearish..despite the recent stock rally that's next.
still ahead a stock picker who remains bearish..despite the recent stock rally that's next. despite the recent run-up in stocks our next money manager is still bearish on the market. we are now joined by mark kollar / kollar wealth advisors. let's go over your previous picks. is your goal with the short etf to get rid of them as soon as you see a spike up? yes it is. it is a tool to hedge your portfolio that is it. the u.s.
dollar index bottomed out in 2008 and 2009. are you still holding on to uup and what is your forecast for it? very little uup right now but we will own more of it in the future. what happens is deleveraging. the government is actually trying to stimulate the economy. the problem is it's deleveraging faster than the government can put money into the economy. it sounds crazy but that means there are fewer dollars. so you are not bullish at all on the dollar index? i am but not as much as before. we are looking as there is a retraction in the market to purchase more. let's go over some new ideas now. number one the federated prudent bear fund it is bear x. right now it is around $5. do you have an exit price on that? no i have really what is an entry price first. i want to explain how the
tool works but we really do not have enough time. it is a hedge for people who are active investors and unfortunately it is expensive to purchase but it moves very very quickly. you should look into it and own at least a portion of it so you can own it push a button and leave some more money in there as the market retraces. you have to get out very quickly though? you have to be in it before it moves, if you look at the charts it takes off like a rocket. what is your forecast on the dow? i think it could go to the april highs of this year which is about 11 2 or something like that so don't be surprised. there was a little head fake there on the upside
but we are unfortunately looking for a major retraction in the market between now and the end of the year. a major retraction like 20 percent possibly? more than that actually. it could be as high as 40%. let's talk about your second pick. you are bearish on real-estate. how are you playing that? we polled a lot of real estate investors and we drive around and actually talk to realtors both in commercial and residential. what we are finding out is that there is a huge supply that they cannot unload. they are happy they have all the contracts to represent these people or institutions but there is nothing moving right now. so you're looking at the short real-estate the etf, ticker symbol rek. and you are buying that? yes that is correct. that is a inverse fund. it goes up as the real-estate market goes down? yes that is correct. that
has been in a very strong downtrend. it is about 85 percent strong downtrend. that is when you want to be there to actually purchase it. so it's becoming oversold. i want to go over the numbers for the existing home sales. they are down 32% from the peak in 2007. how much worse can it get? it is hard to believe but truth sometimes is the best medicine. we are actually looking at the market to go down another 20 percent. that is in general across the united states we are not talking about specific areas. that is pretty extreme. we are getting back to real value if you look at all the trends historicaly we will be right back where we need to be. another hedge you have is you are bullish on gold. yes i am. what are you buying here to be bullish? as far as gold goes, and there are a couple ways to do it, gld is one tool you can use. it is not like physically owning gold so you have to be careful with etf's. we are however looking for it to continue up even six months after the market retraction.
very soon after you will want to get out of it. thank you very much for your ideas mark kollar / kollar wealth advisors. and still to come in the show could we see a pick up in volatility? we'll find out after this break. after this break. travel advisories to small business loans. retirement savings to medicare coverage. id theft protection to contacting elected officials. student loans to taxes on-line. whether you have information to get or ideas to give, is the official place to connect with your government. from surplus car auctions to finding a new job, our new mobile apps will keep you updated on the go. so from marriage records to passport applications, veteran's benefits to birth certificates,
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let's take a look at the vicks with jamie tyrrell / group one trading. last week you had some big heavy volume happening with options trading on the volatility index 145,000 contracts trading. what does this week look like? volume has been so strong we are having expiration coming up here on tuesday. it has been strong last week and strong this week and it usually builds up after a big move. we touched the lowest level we have been at since the flash crash closing monday at 2121. so the move downward in the vicks has really spurred optimism in the market and spurred a lot more action in the pit. based on the options paper are they bearish or bullish on this market? this is definitely a short-term low we have been in in the vicks so you are seeing the expected people coming and valued buyer's looking for some upside protection on the 30 or 25 line.
what's interesting is you are also seeing a lot of people going by the 20 puts which is reasoning why we could also move lower. prices on everything are pretty much going up since we've had such a range recently. both put buyers and call buyers. do you think we are breaking out of that range with the s&p 500 here? it has been a steady up week in the s&p 500 so the vicks has certainly broken out of the range. i think whether or not the s&p 500 will continue to move up is something that will be answered over the rest of the week. thank you for joining us jamie tyrrell / group one trading. thanks for joining us everyone remember viewer mail is coming up this friday so call in your comments or send them via email.have a great day we'll see you tomorrow.
it was more surreal than anything. you're under fire. you're getting blown up. there's definitely adrenaline. there was the explosion, and i remember just opening my eyes, and it got both of my legs. i had surgery after surgery, you know,
i was on a lot of pain medicine. "what's going to happen next? and how long am i going to be here?" the wounded warrior project dropped off a backpack for me. and it had everything in there that i could possibly have needed at that time. peer visitors, people who have been where i had been before, said, "look, brother, "everything's going to be okay. "three months from now, or four months "from now, a year from now, you'll be fine." that type of thing was an invaluable service. to be honest, i don't know if i would be as well adjusted as i am now if it wasn't for them. to learn more, call... or visit